Slimma announces closure of loss-making brands

CLOTHING manufacturer Slimma has announced it is to close some of its loss-making brands as it looks to recover from recession by focusing on its key products.

The Staffordshire company has undergone a turbulent time during the past 18 months as the decline in the clothing market robbed it of many of its customers.

The difficulties faced by the company were revealed in its annual results, which showed a 22% fall in sales from £13.49m in 2008 to £10.46m for the year ended October 2, 2009.

Operating losses for the year, before exceptional costs, amounted to £617,000, compared with £436,000 in 2008. The loss includes £100,000 of additional bad debt provisions compared to the previous year.
 
The company, whose fashion brands include Frank Usher, Michel Ambers, Splendour lingerie and Slimma Signature, said it had suffered due to the increased bad debt risks associated with the clothing sector, while difficulties with credit insurance and more expensive credit combined to make the trading environment very difficult.

Carolyn Simons, Slimma chairman, said the uncertain position had prompted the company to push ahead with its restructuring.

“With the potential for further sales losses, the company has accelerated its reorganisation programme based upon a revision of the 2008 strategic financial model,” she said.

“The revised plan includes the closure of smaller loss-making brands to allow full concentration by management on the company’s key brands.

“This revised model should assist the company in its efforts to move away from its loss-making position and provide a better platform for success on the back of an eventual economic recovery.  We are making satisfactory progress towards this goal.”
 
She said that although results continued to be disappointing, management and staff were working extremely hard to ensure the right platform was in place to build for future recovery.

“Despite the current market conditions, the board believes the company will be well placed to take advantage of what it hopes to be an improving economic situation in the coming financial years,” she added.